Published on Mommy Tracked (http://www.mommytracked.com)

How to Cut Childcare Costs.

Kids. Cute? Yes. Cheap? Definitely not. And in the world of oversized kid-expenses, childcare generally tops the list.


The average family spends 7% of their annual income on childcare, and it’s often the second highest household expense after housing. While most industrialized nations offer childcare subsidies and supports, we foot the bill ourselves.


Of course you don’t want to cut back on the quality of your kids’ care, but there are some relatively painless ways to reduce costs. Try these tips to cut your childcare expenses.


• Get an FSA. Flexible spending accounts significantly reduce the annual cost of childcare by allowing you to apply up to $5,000 of pretax income, and they’re offered by 73% of employers. Just meet with someone in human resource and discuss the amount you’d like to set aside.


• Let your employer pitch in. Many organizations offer childcare discounts or subsidies. If yours does, take advantage.


• Use share care. If you can locate a nearby family with compatible childcare needs, share care is the secret sale of babysitting. You share a sitter by bringing the children together and rotating houses every other week. The parents split the exorbitant cost of in-home care, and the children enjoy built-in socialization in a comfy known environment.


• Schedule creatively. Some parents minimize required childcare hours by negotiating complementary work schedules. You could work days and your husband could work evenings, for example. Or you could work weekends when he’s home with the baby. This approach has obvious downsides, (“Is that you honey? I haven’t seen you in the daylight in months.”) but it does save money.


• Use relative care. Relatives are the most common non-parental caregivers in the U.S. for kids under six, accounting for almost half of children that age in childcare. And why not? They’re usually free and they may be the only people on the planet who like your kids even more than you do.


• Claim childcare tax breaks. The federal Child and Dependent Care Credit can help offset annual childcare expenses, and many states offer additional credits or deductions. If you’re setting aside pre-tax money in a dependent care FSA, however, you can’t also claim the tax credit. Contact your human resources department, an accountant, the IRS, or your state’s Department of Revenue for specifics.


• Do a thorough search. Daycare and babysitting costs often vary wildly even within communities. Don’t just settle for the first provider you find. Explore your options until you identify one that meets all your key criteria—and offers an affordable price.


Unless you recently won the lottery, childcare will always be a big chunk of your family budget. (And if you did win the lottery, you and your kids are probably hanging out on a tropical island anyway.) In the meantime, some strategic planning can make those childcare costs a little less scary.

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